The loan market was relatively flat in November owing to rising supply volume and concern regarding the fiscal cliff. Looking ahead, there are strong indications for demand, however macro concerns abound. Check out LCD's new, free web site, LeveragedLoan.com http://www.leveragedloan.com * Leveraged finance job postings * Online Loan Market Primer * LCD News * Market Stats Check out the video presentation http://www.youtube.com/watch?v=Gj76LBhEBt4 Connect with LCD Facebook: http://www.lcdcomps.com/facebook Like LCD on Facebook for monthly analysis on LBO/Private equity stats, as well as Default/Restructuring analysis. LinkedIn: http://www.lcdcomps.com/linkedin There are over 9,000 market contacts in LCD's Leveraged Loan Group Twitter: http://www.twitter.com/lcdnews News, commentary, other leveraged finance info Web: http://www.lcdcomps.com Contact: marc_auerbach@spcapitaliq.com

1. Text
US Leveraged Finance Market Update
December, 2012
Steve Miller - Managing Director

3. S&P/LSTA Index - Average Price
97
95
93
91
89
1/11 3/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 11/12
Source: LCD - Leveraged Commentary & Data

4. Visible Loan Flows (Source: LCD, EPFR)
$8B
CLO Issuance
Loan Mutual Flows
$6B
Text
$4B
$1B
-$1B
11/11 12/11 1/12 2/12 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12
Source: LCD - Leveraged Commentary & Data, EPFR

5. S&P/LSTA Index Loans Outstanding
$550B
$517B
$483B
$450B
1/11 3/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 11/12
Source: LCD - Leveraged Commentary & Data

6. Average New-Issue Clearing Yield of First Lien Loans
All-BB
All-B
9%
8%
7%
5%
4%
3%
1/11 3/11 5/11 7/11 9/11 11/11 1/12 3/12 5/12 7/12 9/12 11/12
Source: LCD - Leveraged Commentary & Data

7. Dividend Loan Volume
$10B
$8B
$5B
$3B
$0B
1/12 2/12 3/12 4/12 5/12 6/12 7/12 8/12 9/12 10/12 11/12
Source: LCD - Leveraged Commentary & Data

8. Loan Default Rate
12%
10%
7%
5%
2%
0%
12/98 8/00 4/02 12/03 8/05 4/07 12/08 8/10 11/12
Source: LCD - Leveraged Commentary & Data

9. Loan Market - Outlook
• Strong indications for demand:
> CLO calendar chock-a-block
> Retail flows
> Institutional allocations
• Deal flow: more hazy
• Macro concerns abound
Source: LCD - Leveraged Commentary & Data

10. Final Thought - Record Leverage Finance Volume
Pro-Rata Institutional High-Yield
$800B
$600B
$400B
$200B
$0B
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
.11
2
.1
29
29
1.
1.
-1
-1
D
YT
D
YT
Source: LCD - Leveraged Commentary & Data

11. Follow LCD
www.lcdcomps.com
news, analysis, research, archives
www.linkedin.com/groups/LCD-Leveraged-Loan-Group-2092432
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www.twitter.com/lcdnews
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